By Jonathan Davies

The government's plans to give further tax breaks to the British film industry have been approved by the EU.

The measure, first announced by the Chancellor George Osborne in the Budget, will allow film companies to claim tax relief of 25% towards the costs of production. It is hoped that the tax breaks would attract more film production to the UK.

The plans mean that a film costing £40m to produce would receive an extra £10m in tax breaks.

Under state-aid rules, the plans required EU approval.

George Osborne said: "These tax credits, that support both film and TV production, create around £2bn worth of business for Britain.

"That's many thousands of jobs and lots of different industries, not just acting but film-making and costume design and set design.

"All of those things are really brilliant jobs supported by this brilliant industry. It's also a great advert for the country."

Amanda Nevill, chief executive of UK film body the BFI, said: "The film tax relief is a key ingredient in the UK's winning combination of outstanding film-making talent and crews, world-leading studios and facilities, and iconic locations.

"It keeps us competitive on the world stage, and helps grow our economy and create jobs at home.

"We warmly welcome this extension to the tax relief and the government's continued commitment to the UK's thriving film industry."